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The Secret of the Right Trading Mindset

10:42 AM Mar 25, 2020
2036
Trading Psychology

Sometimes the secret to success lies in the most unexpected things. Profit doesn’t come to traders thanks to a mathematical mindset or luck. It all starts with the right thinking. If you want to achieve something in life, whether it is a success on Forex or anything else, then you need to look inside yourself and tune in the right way.

How you relate to your trading results affects your performance. Negative emotions have not been useful to anyone in this matter. There are a couple of tricks to help you gain the right trading mindset. However, the main thing is to accept the fact that this is an important issue and that a solution is quite comprehensive.

Start with Your Inner State

What you feel in your daily life inevitably affects your trading. At least in the beginning, when you still cannot clearly control your emotions. It is important to reduce overall stress levels. Solutions can be individual:

  • Get up earlier - in the morning we are more productive and we have more chances to succeed
  • Sleep more - lack of sleep affects all aspects of life
  • Try to meditate - you can reduce stress and learn to absorb information faster
  • Get rid of obvious sources of stress - poor environment, terrible employer, etc.
  • Take more time for yourself - find something to your liking, such as sports, walking, music, etc.

You got the idea. When you open the chart your thoughts should be clear. To do this, you need to heal your inner state.

Exit Your Trades Properly

Opening a trade by all the rules is only half the success. You need to understand when to exit. And this applies to both profitable and unprofitable transactions.

I understand that you want to recoup and you expect that your unsuccessful position can unfold at any time. But the chances for that are way too low. It is important to understand when the position is not worth it and it’s time to close it. This way you can control your losses.

The same goes for profitable trades. There are times when you need to close a position even when it makes a profit. This applies to closing trades at the end of the day, week or prior to major news releases. The risk that a profitable trade will turn out to be a failure is very high. Therefore, it is important to overcome yourself and close it on time.

Don’t Quit Learning

The market is constantly evolving. The moment when you can say that you know everything about Forex will never come. The more knowledge you have the more confidence you feel. And a confident trader is a successful trader.

When you have finished mastering basic knowledge you can switch to studying new trading strategies, advisors, indicators. You can subscribe to special channels for traders, listen to podcasts. Thus, you will always be aware of the latest news and developments and be able to benefit from your knowledge.

Learn from Others’ Experience

Of course, the best way to learn something is to experience everything yourself. But isn’t it better to know in advance about gross errors in order to avoid them or about tricks that can be used? All traders follow the same path. So why don’t you take advantage of the experience of other people who have already built a successful career on Forex?

Good literature will help you get into the head of professional traders and tell you how to set up your mindset.

Analyze Your Trading Experience

The only way to evaluate your results is to keep scrupulous notes. Traders have invented a trading journal for that purpose a long time ago. This is an indispensable tool for any trader. It will help you not only monitor your progress, draw useful conclusions and improve your trading system but also teach you how to control your emotions.

The more detailed your journal is the more beneficial it might be. If you know what emotions you had at the time of unsuccessful trade and what provoked them, then in the future you will know when you should avoid trading.

Take Emotions Under Control

Yes, easier said than done. But if you don’t do that then you have nothing to do on Forex. Emotions in trading is a time bomb. Even if you were lucky earlier, in the end, you will explode and lose all your capital.

Accepting the inevitability of losses, as well as understanding that you don’t have power over the market and it owes you nothing, will help control your emotions. Even if you have a losing streak it doesn't mean that the next transaction will reimburse your losses. And this is beyond your control. The only thing you can actually control is your risk levels. Accept the fact that there will be losses and make sure that you lose just as much as you expected:

  1. Always set Stop Loss. And I mean “always”!
  2. Set the risk percentage from the total balance for each transaction - no more than 3%.
  3. Set the risk percentage for simultaneously opened transactions - no more than 6%.
  4. The risk-to-reward ratio should be at least 1 to 2. And preferably 1 to 3.
  5. Properly choose the leverage size and the volume of your transactions.

All in All

The way you see the market is of great importance. If you want to succeed you need to understand how the market works, feel its mood, and know how to react to its movements. The experience and right mindset will help you out.

Start with yourself. Don’t enter the market in a bad mood. Don’t let emotions control you. Learn to see only numbers on charts, not money. Only in this case, you can get the right trading mindset that will help you enter the 10% of lucky traders who have built a successful career on Forex.

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morning routine unusual trading tips useful habits
trading mindset beginners novice traders trading strategy forex trading trading plan broker losses forex mistakes trading habits women in Forex female traders risk management profit trading instruments pairs price advantages of forex leverage FXCL investments copy trading advantages of Forex social trading professional traders trading psychology demo trading buy/sell bid/ask spread Metatrader 4 market analysis technical analysis fundamental analysis trade trading platform Forex trading novice trading dealing with losses charts timeframe indicators MetaTrader 4 trading routine support level resistance level trend low-hanging fruit stop loss loss trading history long-term goals open trade close trade daily charts swing trading intraday trading scalping trading setup Forex traders bullish bearish resistance support MA 200 trend trading professional trading EMA EA daily chart weekly chart Forex news highs lows account type cent trading Mini Micro Cent Partnership commission fees trading terms Stop Loss news trading economical calendar major news release currency pair currency rate national currency trading journal trades profit/loss emotions news release positions size Expert Advisors platform trading robot cryptocurrency volatility day trading position size lot account types cent accounts Mini account ECN Copytrade ECN accounts swap-free minimum deposit order execution liquidity providers demo accounts real account low-risk trading EUR/USD economic calendar majors cross-currencies exotic currencies base currency quote currency quotes bid ask Brexit United Kingdom European Union GBP Euro GDP WTO price levels moving average 4-hour chart 1-hour chart bulls bears false breakout cross-currency USD price action pin bar trading inside bar trading hands off breakeven stop loss 50% stop loss pin bar high-frequency trading position trading swings breakout strategy trading style Entry order Take Profit hammer shooting star inside bar pinocchio bar head and shoulders harami risk to reward ratio trading calculator trader’s age emotion control stop-hunting false signal trading session New York session Asian session non-farm payrolls fed rates decision central banks mentor teacher Forex education Forex books candlesticks bonuses tradable bonus no deposit bonus deposit bonus cashback pending orders counter-trend trading risk-to-reward ratio 1-2% rule uptrend downtrend news releases slippage emotional trading stop orders limits orders trailing Stop correlation Correlation Matrix EURUSD EURJPY RSI Overbought/Oversold indicator doji morning start candlestick pattern liquidity London session gap requote US dollar greed excessive trading Expert Advisor trading instrument Twitter Trump euro canadian dollar japanese yen mexian peso currency pairs Fed China economic news currency wars USA interest rates trade agreement H1 H4 D1 sell trade buy trade price level trading system checklist Default mode network Nonfarm Payrolls intraday traders lot size Stop Out margin breakeven pip point entry price chart candles weekly candle daily candle engulfing candle Doji W1 Coronavirus epidemic macroeconomics markets CNY Bitcoin gold Jerome Powell fears money management trading signals Charles Dow Dow theory primary trend Relative Strength Index signals market noise trading volume oversold/overbought corrections candle M30 GBPUSD GBPJPY pending order fundamentals Interbank order Stop order Limit order Standard account Interbank account liquidity provider M5 chart XAUUSD Chinese yuan flat US Dollar Fed Interest Rates inflation level XPTUSD platinum XAGUSD silver USDCNY Chinese Yuan instruments swap trading hours Buy Stop Sell Stop Average True Range ATR range sideways range price level trading scripts Excel tables entry point equity balance applications highs and lows RSI Fibonacci terminal server proxy OS Windows XP self-trading Forex advantages gap trading Fibonacci levels USDJPY Buy Limit Cherry Blossom market cycle mark-up mark-down consolidation distribution long positions short positions double bottom triple bottom double top triple top pattern signal presidential cycle Elliott wave Kondratiev wave Forex terminology quote standard lot mini-lot micro-lot cross pairs exotic pairs counter-currency terminology Margin Call long position short position buy sell candlestick chart bar chart line chart range market channel high low ADX OHLC patterns profit level martingale aggressive EAs VPS demo account EA tester MeaTrader 4 trading signal chasing the market clicking the button COVID-19 oil trading lot EUR cent account Forex mentor novice trader emotions control fear psychological level round numbers Key Levels indicator MetaQuotes iOS Android mobile trading mobile terminal VPS server financial portals day trader position closing short timeframe fast trading news site news portal FXStreet Investing.com Forex Factory ForexLive DailyFX CPI PPI economic indicators Non-Farm Payrolls monetary policy FOMC retail sales inflation rates program installation intuition apps ECN brokers market makers financial markets indices commodities stock metals trading robots Forex mentors confidence bias low-frequency trading set and forget end-of-day trading exit trade auto-trading OCO trailing stop auto-management competitive advantage partnership IB referral Introducing Broker Sub-IB EURGBP EURCHF Donald Trump Twitter exotics minors trading patterns wedges pennants triangles breakout trading range trading confident trading trading goals japanese candles stars morning star evening star Japanese candles inverted hammer hanging man abandoned baby spinning top spinning bottom bars harami cross engulfing belt hold sandwich piercing line dark cloud cover marubozu three black crows upside gap two crows inverted head and shoulders trading figure trading pattern spike bearish spike bullish spike Mrs. Watanabe beginner trader carry trading young traders women traders figures diamond divergent triangle symmetrical triangle reversal signal morning routine unusual trading tips useful habits